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Thursday, July 16, 2015

The Privateers give a broadside to the Greeks

Nobody was surprised by what is happening to the Greeks. It's happened in one way or another to country or state after state, around the world. Since the end of official colonialism, the central powers may be less likely to send in troops everywhere, but the use of central banking, exchange rates, and trade power has been used over and over again to shift the debts of corrupt officials and corrupt bankers to the general publics of the countries they are looting. The Germans, the Japanese, the Chinese and even the Russians have, mostly, traded their military Uniforms for Uniform Suits. It's not outright war anymore. It's "just business" -- with the model as the Godfather.

Greece is only the latest Example

The only thing different about Greece is that, like Iceland, at least some people have tried to resist the tyranny.

"For decades, Greeks have suffered governments that are both corrupt and dishonest. The election of SYRIZA changed all that: the government is now merely dishonest."

The reality is that the Greeks are under the Thumb of the World Bank, IMF, European Union and Dracula Draghi.

“Our new SYRIZA Prime Minister, Alexis Tsipras, correctly called the austerity plan “blackmail.” However, before Sunday’s vote, Tsipras told the nation a big fat fib. He said we could vote down the European Bank’s plan but keep the European Bank’s coin, the euro. How? Tsipras won’t say; it’s part of a policy ploy his outgoing finance minister Yanis Varoufakis calls “creative ambiguity.” To translate: Creative ambiguity is Greek for “bullshit.”

Banker Usury

"Sorry, Alexis, if you want to use the Reich’s coin you have to accept the Reichsdiktat."

And Greg was on-hand when the European Union was designed as a vehicle to both Unite and dominate European Countries. In his article "Robert Mundell Evil Genius" Greg Palast writes:

"The idea that the euro has "failed" is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do."

As we used to say in the requirements engineering world; The system is working as [badly] designed. Palast writes:

"The architect of "supply-side economics" is now a professor at Columbia University, but I knew him through his connection to my Chicago professor, Milton Friedman, back before Mundell's research on currencies and exchange rates had produced the blueprint for European monetary union and a common European currency."

In his article he describes the incredible behind the scenes influence of Robert Mundell on both Reagan and Thatcher:

"Ronald Reagan would not have been elected president without Mundell's influence," once wrote Jude Wanniski in the Wall Street Journal. The supply-side economics pioneered by Mundell became the theoretical template for Reaganomics – or as George Bush the Elder called it, "voodoo economics": the magical belief in free-market nostrums that also inspired the policies of Mrs Thatcher."

But the reality is that "free-market" is myth for the Hoi poi (US), the real purpose of monetarism is discipline:

"Monetary discipline forces fiscal discipline on the politicians as well."

Systemic Corruption

The problem is that if you give bankers access to money and a mandate to seek the highest returns with that money. And if you further let them profit from churning investments and unlimited commissions. Then you are encouraging bad behavior. Mundell's system imposes limits on Politicians and the people -- but not on bankers. On the contrary the neo-liberal lie is that markets set prices perfectly and denies the very existence of corruption and speculation. But in search of high profits and high commissions, bankers cheat. They speculate. Which means they do three things:

They take on risky investments, especially with "Other People's Money"

They try to hedge their own risk with derivative bets, pushing risk on "Other People."

They lie to both borrowers and lenders, defrauding both.

A corrupt system can boost short term profits by investing from borrowed money. This reduces the profitability of a company in hard times but enhances it in the short run. This is known as Leverage. Governments can be tricked in the same way. They are induced to take on "gifts" of money -- at interest -- only to find that they can't pay back those loans and the interest at some point due to variations in weather and/or the business cycle. This is what has been happening to Greece -- and it was planned.

Credit based money is inherently dangerous. And when a country's credit is owed to outside bankers, the danger comes from a need for trade and even raw military power. These tactics might seem new. But long before Mundell European nations were enslaving nations and the people in those nations using these same financial tricks. At one time countries that didn't pay their bills were invaded. As the USA periodically has done to so-called "Banana Republics" and as France notoriously did in the 19th century when they invaded Mexico in the 1860s to install Emperor Maximillian. Nowadays they just send in the armies of lawyers and faux economists:

"And when crises arise, economically disarmed nations have little to do but wipe away government regulations wholesale, privatize state industries en masse, slash taxes and send the European welfare state down the drain."

Then they use the lack of sovereign and stable money as an excuse to loot the country:

Thus, we see that (unelected) Prime Minister Mario Monti is demanding labor law "reform" in Italy to make it easier for employers like Mundell to fire those Tuscan plumbers. Mario Draghi, the (unelected) head of the European Central Bank, is calling for "structural reforms" – a euphemism for worker-crushing schemes. They cite the nebulous theory that this "internal devaluation" of each nation will make them all more competitive.

When you sell off productive assets, the purchaser gains guaranteed rents, the local politicians get kickbacks and the the citizens get the shaft. Privateering with Roads, Bridges, Rails, Telegraphs and yes the Internet has always followed this ark. Private monopolists might deliver good service while duking it out as to which one should dominate the country, but eventually they deliver failure. What Dracula Draghi is advocating isn't reform, it's looting. That too is old. When the USA resisted the East India Company they were in the process of finalizing their trashing of India, which started when the Moghuls gave them monopolies and delegated government services.

And the Euro is no different. As Palast says:

"The imposition of the euro had one true goal: To end the European welfare state." [Mundell]

Germans should remember that the same policies that are being used against Greece are in the works for them. In another article in the e-magazine "Business Insider:"

Further Reading

I have a lot more I'd like to write, but I'd suggest you just read the references here, starting with Yanis' "Terms of Surrender". Yanis was acting the prophet in negotiations with the Euro Commissioners. The result was predictable - he was made personae non grata and kicked out of the negotiations. He does an excellent post mortem on just how tyrannical and oppressive this agreement is:

The way they were referring to "SYRIZA" I thought they were referring to a person but:

"The Coalition of the Radical Left[11] (Greek: Συνασπισμός Ριζοσπαστικής Αριστεράς, Synaspismós Rizospastikís Aristerás), mostly known by the backronym Syriza (a Greek adverb meaning “from the roots” or “radically”, and sometimes styled SY.RIZ.A.; Greek: ΣΥΡΙΖΑ, pronounced [ˈsiɾiza]), is a left-wing political party in Greece, originally founded in 2004 as a coalition of left-wing and radical left parties. It is the largest party in the Hellenic Parliament, with party chairman Alexis Tsipras serving as Prime Minister of Greece."

"﻿Meanwhile, cities and states across America have been forced to cut essential services because they’re trapped in similar deals sold to them by Wall Street banks. Many of these deals have involved swaps analogous to the ones Goldman sold the Greek government. And much like the assurances it made to the Greek government, Goldman and other banks assured the municipalities that the swaps would let them borrow more cheaply than if they relied on traditional fixed-rate bonds—while downplaying the risks they faced. Then, as interest rates plunged and the swaps turned out to cost far more, Goldman and the other banks refused to let the municipalities refinance without paying hefty fees to terminate the deals."